Home Daily Commentaries UK Manufacturing PMI contracts sharply

UK Manufacturing PMI contracts sharply

Tuesday 23 August, 2022

Daily Currency Update

This morning UK manufacturing PMI data was released. It dropped to 46.0 from 52.1 the previous month, which represents contraction in the UK manufacturing sector. UK services PMI printed a figure of 52.5, better than the forecast of 51.5. This has left GBPUSD trading in the 1.17s. GBPEUR has been trading in tighter ranges, as markets see the eurozone’s and the UK’s economic outlooks following similar rocky paths.

Key Movers

EURUSD had another sharp day of losses yesterday, as a breach of parity led to a break below 20-year lows. While, in the short-term, EURUSD is considered undervalued by some, a prolonged short-term undervaluation is not unwarranted, considering the unprecedented risks to the eurozone’s economic outlook, which includes the continuous increases in energy prices and increasing inflation.

Expected Ranges

  • GBP/USD: 1.1700 - 1.1820 ▼
  • GBP/EUR: 1.1775 - 1.1915 ▲
  • GBP/AUD: 1.7000 - 1.7200 ▼
  • EUR/USD: 0.9890 - 1.0045 ▼